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Unit Titles Act 2010

The Unit Titles Act 2010 covers how unit title developments are created and managed and, importantly, the rights of unit owners and how they can exercise those rights.

Unit titles are the most widely used form of multi-unit property ownership. They allow owners to privately own an area of land or part of a building and share common property with the other unit owners.

This combination of individual and shares ownership of land and buildings, often in an intensive built environment, means owning a unit title involves a different set of rights and responsibilities than traditional housing and land ownership.

In addition, unit title developments have a body corporate management structure to ensure decisions affecting the development can be made jointly by the unit owners. This can be challenging at first for anyone not used to communal ownership.

Transition under the new Act

Most of the provisions of the Act will apply from June 2011, with the other provisions applying from the end of a 15 month transition period. The transition period gives bodies corporate time to prepare for the new maintenance requirements and new default body corporate operational rules contained in the Act.

An existing body corporate can opt-in to these new requirements at any stage before the transition period expires.

Existing body corporate rules

Body corporate rules made under the Unit Titles Act 1972 will continue to apply during the 15 month transition period. However, many of the provisions in these existing rules will be overridden by the 2010 Act.

The default body corporate rules are currently set out in the schedules to the Unit Titles Act 1972. Under the 2010 Act, the default body corporate operational rules will instead be set out in the regulations. These new default rules will be reduced in scope, as many matters previously governed by the rules are now set out in the 2010 Act itself.

From June 2011, provisions in the 2010 Act will override the corresponding provisions in existing body corporate rules, including the provisions relating to:

• the duties of owners and the body corporate;

• the operation of the committee; and

• meetings and voting.

This does not apply to rules covering the body corporate's maintenance obligations, which are also covered by the transition period.

Bodies corporate should review their existing rules to determine which will apply during the transition period and which have been overridden by the 2010 Act.

New body corporate operational rules

The new default operational rules prescribed by the regulations made under the 2010 Act will apply once the transition period expires. Bodies corporate will be able to revoke, amend or add to the default rules set out in the regulations, and should use the transition period to prepare any changes to the new rules that they consider necessary.

Changes cannot be made to any of the matters that were in the existing rules and are now set out in the 2010 Act itself.

Maintenance requirements

Under the default body corporate rules in the 1972 Act, a body corporate is responsible for maintaining the common property as well as utilities serving the units. The 2010 Act expands the maintenance requirements for bodies corporate, but these new requirements will only come into force after the 15 month transition period.

On expiry of the transition period, a body corporate's responsibility for maintenance will cover the common property, as well as all building elements and infrastructure which serve more than one unit. Bodies corporate will also be required to set up a long-term maintenance plan and establish a fund for that plan.

If you have any questions about the new Unit Titles Act and the implications for your property or body corporate, please contact us.